STR 401 Lecture Guide Economist’s Model of Behavior Economic Theory of Choice Basic Assumptions 1. Self interest- 2. Unlimited wants and limited resources- 3. Constrained maximization- a. People will also try to minimize constraints 4. Creativity- indv max. their personal satisfaction given resource constraints Marginal Analysis and Benefits- more than dollars and cents 1. When to use it: in your own life and to change behavior 2. Sunken cost- costs and benefits
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School of Economics and Finance University of Tasmania CRICOS Provider Code 00586B 1 1. Elasticity (For details of essential readings and key learning objectives see MyLO and Study Guide 6) 2 Policy-makers: ◦ Need to understand how strong the effects on equilibrium price and quantity will be of various shifts in demand and supply, including policies that rely on changing the incentives that buyers and sellers face in markets. The strength of these effects will determine the
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4.3 MARKET DEMAND Market demand curve is curve relating the quantity of a good that all consumers in a market will buy to its price. From Individual to Market Demand Table 4.2 | Determining the Market Demand Curve | (1) Price ($) | (2) Individual A (Units) | (3) Individual B (Units) | (4) Individual C (Units) | (5) Market (Units) | 1 | 6 | 10 | 16 | 32 | 2 | 4 | 8 | 13 | 25 | 3 | 2 | 6 | 10 | 18 | 4 | 0 | 4 | 7 | 11 | 5 | 0 | 2 | 4 | 6 | 5 4 3 2 Market Demand
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maximizing businessman would always raise prices when facing an inelastic demand curve, but might or might not raise prices when facing an elastic demand curve? Explain and justify your answers in detail. Elasticity: “The percentage change in one variable relative to the change in other variable”. Price elasticity of demand is defined as “parentage change in quantity demanded, caused by a 1 % change in price. Total revenue = Price * Quantity demanded The demand
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sensitive to market prices. Given that, describe the effect of each of the following on the quantity demanded or the demand for gasoline in Japan. Indicate whether the effect of each is an upward or downward movement along a given demand curve or instead involves an outward or inward shift in the demand curve for gasoline. Explain your answers. a. A sharp increase in the average price of gasoline in Japan.b. A sharp rise in the price of automobiles in Japan.c. A fall in the price of public transportation
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Satisfaction 5.1.1 Algorithm for computation of Satisfaction Levels 5.1.2 Explanation of Algorithm 5.1.3 Analysis from Satisfaction Levels 5.1.4 Results 5.2 Income Demand Elasticity 5.2.1 Aim 5.2.2 Data Collected 5.2.3 Interpretation of Data 5.2.4 Utility Curves 5.3 Price Demand Elasticity 5.3.1 Aim 5.3.2 Data Collected 5.3.3 Interpretation of Data 5.3.4 Utility Curves 5.4 Utility Curves 5.4.1 Aim 5.4.2 Data Collected 5.4.3 Interpretation of Data
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Products of sony Introduction of sony vaio Factors of production Impact on production by change in factors Determinants of Demand Affect on demand by change in determinants Price elasticity of demand Price elasticity of supply Income elasticity of demand Advertisement elasticity of demand cross elasticity of demand Market structure Opportunity cost Government policy Foreign trade policy Import duty Impact by government policy Impact on technological change Impact of
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Income Elasticity of Demand 3. Role of Managerial Economics 4. Trend Projection Method 5. Economies of Scale Section B (30 marks) (Attempt any three) 1. Discuss the approaches to consumer demand analysis. 2. Describe the various methods for surveying the consumer. 3. Make a list of differences in complimentary goods and substitutes goods. 4. “Elasticity of supply is the degree of responsiveness of quantity supplied to a given change in price”. Explain
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Effects of Petroleum Prices on the Economy Crude oil prices have taken a dive in the last month, causing the gasoline prices to plummet. Consumers are more than ecstatic to see the prices fall, but this current trend in prices will undeniably be short term. For most of us the prices of petroleum is only apparent at the gasoline pump, but there are multiple products affected such as diesel and heating oil. The intent of this paper is to focus more on gasoline prices, supply and demand of
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” Economic Analysis – Autoliv U1467389 CONTENTS 1. INTRODUCTION TO THE FIRM……………………………………….1 2. VULNERABILITY…………………………………………………………3 3. MARKET EXPOSURE…………………………………………………...4 3.1 3.2 3.3 3.4 3.5 3.6 GDP variation and Income Elasticity…………………………...4 Market Factors……………………………………………………6 Customer Dependence………………………………………….7 Competition………………………………………………………..8 Non-Economic Factors…………………………………………..9
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